Goodbye, Personal Checks: Five Consequences of the Rise of Debit Cards (No. 5: You Can't Game the System, Dammit!)
Businesses continue to report that more and more people are paying electronically, either through debit or credit cards or automatic payments, than they do by the classic method of writing a personal check.
People still do this?
How many times do you actually pull out your checkbook these days? Not very often, unless you're a traditionalist, in which case everyone behind you on the supermarket checkout line is pissed off.
The looming end of the personal check era -- one day check will be like S&H Green Stamps -- has consequences. Here are five that bug us, with a hilarious bonus one at the end:
5. Oh, that lovely float
Back in the day, we worked at a large metropolitan newspaper that had a window in the business office where you could write personal checks for cash.
Every young (read: poor) employee working there knew exactly how much in advance of payday they could write a check for cash despite not having enough funds to cover it. We think it was noon Thursday, but the point is because of the time-consuming process of getting those personal checks debited from your bank account, you were assured you'd be able to get your paycheck, dash to the bank and get it deposited in time. Unless, of course, there was a three-car fatal on the interstate you had to cover, in which case you were screwed.
The so-called "float' was a thing of beauty in check-writing, and debit cards have taken it away.
4. The Catch-22 of direct deposit
Lots of places require employees who want direct deposit to present a voided check. But lots of people today, especially kids, don't have checkbooks. Or if they do, they lose them about as quickly as they get them, since they are never, ever used. So you have to go through hoops, which can range from getting a letter from your bank to your new employer, or just coming up with your account number. (Which is more of a chore than you'd think for some people, who think the only bank number they have is the PIN.)
3. No more canceled checks to settle disputes
We're betting there are plenty of teens today who have no idea what the term "canceled check" even means. But before the domination of plastic, customers had a ready tool on their hands if there was ever a dispute over whether payment had been made -- the actual check, returned to them by the bank after it had been signed and cashed by whomever it was made out to.
You can sign up for e-versions of this now, of course, but -- big surprise -- it's gonna cost you.
2. Alas, autograph collectors
This $10 check ended up being worth a lot more.
Canceled checks -- or even unused checks -- used to be a great source of autographs. A celebrity comes into your store and pays by check for a $5 item? You'd be better off keeping that check uncashed and eventually selling it.
As one group puts it:
Why are canceled checks so attractive for autograph collectors? Checks signed by celebrities are desirable for many reasons. The primary reason is that signatures on cancelled checks are usually real.
Unlike photographs, slips of paper, or index cards where a signature may be open to question, a canceled check is a legal document where a signature has been authenticated by a financial institution. Forgers would not bother to forge a celebrity signature on a canceled check because it is usually not a cost-effective method of deception. Besides, forgers of canceled checks are subject to a variety of commerce laws where punishments can be quite severe.
Two years ago, a $10 check written by Neil Armstrong the day Apollo 11 lifted off sold for $27,350. (Armstrong has long refused to sign autographs, making his signature much sought-after.)